Unauthorised tax-like collections attract penalty even when labelled as service charges or sales tax recoupment.

Amounts collected from customers in excess, or purportedly by way of tax, are prohibited under the Tamil Nadu General Sales Tax Act, 1959 even if described as service charges, handling charges, incidental charges, or recoupment of sales tax. The operative test is the substance of the collection, not its label; if the dealer collects money without authority in a tax-like manner, the collection falls within the mischief of the provision and attracts penalty under section 22(2).

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Issues: Whether the amounts collected by the assessee under the description of service charges, claimed to be recoupment of sales tax already suffered at the first sale point, were nevertheless collections by way of tax or purporting to be by way of tax so as to attract penalty under the Tamil Nadu General Sales Tax Act, 1959.

Analysis: The Court distinguished between cases where the Revenue had not clearly established the excess collection and cases where the excess amount collected was specifically identified and proved. It reiterated that penalty under section 22(2) is attracted when a dealer collects amounts from customers by way of tax or purporting to be by way of tax without authority, even if the amount is described as service charges, handling charges, incidental charges, or recoupment of sales tax. Applying the later line of decisions, the Court held that the assessee's collection in the name of service charges was an unauthorised collection falling within the mischief of section 22(1) and therefore liable to penalty.

Conclusion: The collection of service charges for recoupment of sales tax, to the extent not authorised under the Act, attracted penalty under section 22(2), and the challenge to the penalty failed.

Ratio Decidendi: Any amount collected by a dealer from customers in excess, by way of tax or purporting to be by way of tax, is prohibited under section 22(1) of the Tamil Nadu General Sales Tax Act, 1959 and renders the dealer liable to penalty under section 22(2), regardless of the label attached to the collection.

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